ACCCIM hopes for a business-friendly Budget that delivers a supportive environment for SMEs.

As the Ministry of Finance prepares for the tabling of National Budget 2027 on 9 October 2026, the Associated Chinese Chambers and Industry of Malaysia (ACCCIM)’s expectations are clear: sustain domestic economic growth momentum amid global uncertainty, drive investment in high value high growth sectors, and reforms that genuinely ease the cost of doing business.

The ACCCIM has submitted a comprehensive proposals to the Ministry of Finance in July, outlining key areas and issues, focusing on domestic demand resilience, business facilitation and competitiveness, and long-term value creation.

President of ACCCIM, Datuk Ng Yih Pyng hopes that the 2027 Budget with underscore the importance of regulatory certainty, ease operational costs, improving tax structures, boosting SMEs competitiveness and targeted measures to drive the growth of sustainable sectors such as digital economy, renewable energy and circular economy.

The chamber earnestly hopes that YAB Prime Minister cum Minister of Finance would prioritize and consider the following key focus areas in the formulation of the Budget 2027’s strategies and measures.

Key Focus Areas for 2027 Budget
1. A Hybrid SST-GST Framework

On the record, the ACCCIM has been strongly supporting the reintroduction of GST as it is widely acknowledged that a multi-stage GST is structurally more efficient and transparent than a single-stage SST, as its input tax credit mechanism eliminates cascading compounding costs and captures broader revenue compliance.

However, the government maintains that household income thresholds are still too low, choosing instead to refine the current SST and explore a targeted hybrid SST-GST framework.

While the proposed implementation of a hybrid SST-GST framework helps to remove the cascading tax effect of the expanded scope of SST, it must simplify compliance and ease of administration for SMEs.

The proposed hybrid model must look at the production and sector (functional). For start, review Group J of Malaysia’s Service Tax Regulations 2018 covers Logistics Services.

Ultimately the hybrid SST-GST framework must prioritize simplified administrative procedures and crystal-clear input tax credit rules to prevent compounding costs for businesses.

2. The Stamp Act 1949 (Act 378)

Recently, there have been changes to the Stamp Act 1949 to cover the common instruments, which amongst others include employment contract agreement with monthly wages above RM3,000 per month, all written employment agreements, whether for professional staff like auditors and engineers or operational staff like security guards, require a flat stamp duty of RM10 per contract.

The implementation of self-assessment on the common instruments is expected to marginally increase stamp duty collection by RM300 million while it has increased upfront costs to businesses, especially SMEs and also taxpayers face heightened financial exposure for errors due to the lack of clarity of the Stamp Act 1949.

It is timely to initiate a comprehensive review of the outdated Stamp Act 1949, which is believed to disproportionately affect businesses and individual taxpayers.

Repeal the old draconian law Stamp Duty Act 1949; draft a new and relevant law to reflect the current times.

While waiting for a new Stamp Act is drafted and enacted, exempt all instruments other than the following main instruments currently stamped:

a) Transfers of property;
b) Transfers of shares, stocks or marketable securities; and
c) Loan agreements.

For Singapore, Stamp Duty only applies to specific documents related to immovable property (like leases and property purchases) and stock or share transfers. Standard service agreements, business-to-business contracts, or employment contracts for security and professional services (such as legal, consulting, or guarding services) are categorized as general service contracts and are exempted from stamp duty.

3. Preferential Tax Relief for SMEs

SMEs need financial relief. It is proposed that to raise SMEs preferential tax threshold higher to the first RM500,000 of chargeable income (at 15%) from RM150,000 and the next RM500,000 up to RM1 million (at 17%) from RM450,000.

There will be an increase in allocation for various funds at reasonable cost of borrowing to support SMEs.

Consider to lower the service tax rate on non-residential rental and leasing services for MSMEs from 6% to 4%. Additionally, the annual sales exemption threshold for SMEs tenant increased from RM1.5 million to RM3.0 million.

4. Mitigating the Impact of Cross-Border Platforms

We support the Cabinet’s decision to strengthen the regulations of e-commerce platforms, including studying and implementing a registration mechanism for e-commerce platforms to protect consumer interests.

The tax harmonization to close loopholes on low-value goods (LVG) and review import thresholds for the overseas factory-to-consumer goods facing the same tax burdens as local retail goods.

It is proposed that to reduce the de minimis threshold for import duty from RM500 to RM50 to remove unfair price advantages.

Require high-volume online sellers exceeding a prescribed sales threshold (e.g. RM1 million annually) to be registered as a Malaysian business entity and appoint a local representative responsible for regulatory compliance and consumer protection matters.

Establish a central database agency to register all legally registered foreign businesses operating in Malaysia for verifying and tracking of their operational status.

5. Raise E-Invoicing Exemption Threshold

Increase the e-invoicing exemption threshold to RM3.0 million in annual turnover or revenue from RM1 million, allowing SMEs to manage rising operational costs without the added burden of mandatory compliance.

Under current e-invoice guidelines, consolidated e-invoicing is not permitted once a single transaction reaches RM10,000, creating operational challenges for businesses handling higher-value transactions.

It is proposed that to review e-invoicing transaction thresholds by aligning cash transaction reporting thresholds with broader AML requirements to RM25,000 for general transactions,

while Dealers in Precious Metals and Stones (DPMS) may be accorded a higher threshold of RM50,000, aligned to the AML framework on customer due diligence (CDD) requirements.

6. Review the Definition of SMEs

Review and update the SMEs definition (last revised in 2013, more than a decade ago) to reflect current economic conditions and business scale changes, so that the mid-tier companies are not unintentionally excluded from the SMEs-related incentives and support measures.